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Health financing sustainability

04 Mar 2014

The Economics and Workforce Committee’s first two terms of reference focus explicitly on the economics of health care financing and funding, and the financing and delivery of health care.

This reflects the importance for the AMA of having a clear and up-to-date perspective on health financing, with the needs of the broader community and our members in mind.

As part of this work, EWC has heard from experts such as Professor Andrew Wilson, Director of the Menzies Centre for Health Policy, University of Sydney, and Professor Elizabeth Savage, Professor of Health Economics, University of Technology Sydney, on health expenditure and alternative financing models and, more recently, from Dr Robert Grenfell, ‎National Director - Cardiovascular Health at National Heart Foundation of Australia on improving hospital performance.

Their presentations demonstrated that the biggest factor driving growth in health care costs is the increasing volume of treatment per case, having twice the impact of either ageing or population growth. 

At our meeting on 15 February, EWC focused directly on the question of health financing sustainability and the role of the medical profession. 

At this meeting I also gave my impression of the broader political context: very little happening on health policy in general. Yes, we had an uninformed ‘debate’ over the New Year period on the so-called $6 patient co-payment proposal, but no position from the Government and nothing like a common view from the various health commentators.

Suddenly that all changed. Four days after EWC’s meeting, Health Minister Peter Dutton gave a very clear and public message that the Government is concerned about financial sustainability, and will be looking carefully at whether changes are needed to current health financing arrangements to ensure they are sustainable.

So, before it was publicly fashionable, EWC engaged in a wide-ranging and thoughtful debate about how the AMA should approach health financing sustainability.

Part of the context for this discussion is the opportunity for the medical profession to be stewards of the health system and its use of resources. This includes spending health dollars wisely, stopping doing things that we know don’t make much of a difference, and doing the things that do make a difference.

As Lord Darzi told the AMA National Conference in Melbourne in 2012, the low hanging fruit of health system efficiency is to translate what we know into what we do. 

EWC agreed there was scope to test a more pro-active approach by the AMA to health financing sustainability in a number of areas, and to put forward proposals that are clinically driven, and that we know will improve health outcomes.  

The Minister’s theme for health financing is sustainability. But he has also identified that he is not prepared to add costs to the system. By contrast, the Minister has identified that he intends for Australians to contribute to their own health care costs when they can afford to do so.

These are challenging parameters for the medical profession.

In any consideration of health financing arrangements, the AMA is in a strong position to show clinical leadership. This will involve working out how the profession can be better organised to collect and evaluate data to inform best practice in clinical care, and health financing arrangements that support that.

Your experiences and insights in these areas, and in health financing more generally, are valuable and can be added as comments to this column.


Published: 04 Mar 2014